As more people move to cities, China eases land rules in villages

MUMBAI (Thomson Reuters Foundation) - Allowing Chinese villagers to rent out their homes and farms could boost development and ease tensions in neglected rural areas where houses sit empty as people migrate to cities, according to analysts.

A policy document released this month said the government would “moderately relax” controls on rights for rural land and vacant houses so people who moved to cities could allow development of their properties or rent out their homes.

The policy could encourage people dissatisfied with rural life to move as they would be able to earn an income from their properties, said Wasana Wongsurawat, an assistant professor and China expert at Chulalongkorn University in Bangkok.

“Urban centres are growing, while the quality of life in rural areas has not improved, leading to growing dissent,” she told the Thomson Reuters Foundation.

“So this may be a way to address that, and entice more people to move to the cities.”

Nearly 59 percent of China’s population already lives in urban areas and further urbanization is key to the government’s growth plans in the world’s second-largest economy.

Chinese land is divided into urban and rural land regimes, granting ownership rights over urban land to the state while rural land is owned collectively and cannot be bought and sold freely.

China began to examine its land use policies in 2014.

The recent policy document was unveiled weeks after the land minister was quoted by state news agency Xinhua as saying the government will allow rental housing on rural land to increase accommodation options.

The government’s decision to relax controls on land falls far short of creating an open market, but analysts said it is an early stage in a major reform process.

“It is significant as a step forward to liberalize land rights,” said Dan Wang, a Beijing-based analyst at research firm The Economist Intelligence Unit.

She said the policy shift – if accompanied by further regulations – may encourage firms to develop large-scale farming.

“If this round of land reform turns out to be successful, it will change the landscape of rural China greatly in terms of forms of employment, agricultural organization and even social structures,” she said by e-mail.

Wang warned that aims of the reforms – to revive rural economies and ease poverty – could be undermined if farmland is appropriated for industrial use, or leads to production of crops that are more profitable than grains to feed communities.